[ssf] Fortress continent

[Dan]

Hey up,

This article may be of interest then: from a while back now, but still 
spot on:

http://www.guardian.co.uk/comment/story/0,,875636,00.html

"What we are seeing is the emergence of a genuinely new new world order, 
one far more Darwinian than the first, second and third world. The new 
divisions are between fortress continents and locked-out continents. For 
locked-out continents, even their cheap labour isn't needed, and their 
countries are left to beg outside the gates for a half-decent price for 
wheat and bananas.

"Inside the fortress continents, a new social hierarchy has been 
engineered to reconcile the seemingly contradictory political priorities 
of the post-September 11 era. How do you have airtight borders and still 
access cheap labour? How do you expand for trade, and still pander to 
the anti-immigrant vote? How do you stay open to business and closed to 
people? Easy. First you expand the perimeter. Then you lock down."



Chris Malins wrote:

> Sorry that I keep posting these articles, but I think that this is a 
> very interesting one. it is apparent that developed nations are 
> pushing for liberalisation under all modes of supply specified by the 
> GATS(General Agreement on Trade in Serivces) except mode 4, which 
> deals with cross border movement fo people. As I have commented 
> before, the pro-liberalisation rhetoric comes to an abrupt halt where 
> any migration issues are involved. This is in many ways more important 
> in terms of the future  openness of borders than anything happening at 
> the domestic level.
>
> Also notice the emphasis on the use of corporate lobbies by the 
> developed world to argue in favour of liberalisation. Its a standard 
> tactic that uses the economic power of business to dwarf the resources 
> of developing countries, and bias negotiations. Its very analogous to 
> the recent victory of the McLibel 2 over legal aid, there can't be a 
> fair process between Uganda on one side and Europe with a pantheon of 
> corporations wealthier than Uganda anyway on the other.
>
> Chris
>
>
> Geneva update
>
> 3^rd March 2005
>
>
>
> SERVICES NEGOTIATIONS: THE AGE OF CRISIS? – DEVELOPED COUNTRIES PRESSURE
> FOR REVISED OFFERS AND THE ESTABLISHMENT OF BENCHMARKS IN SERVICES
> NEGOTIATIONS
>
> By Alexandra Strickner, TIP/IATP
>
> * *
>
>  From February 7- to 25 a three-week cluster of services negotiations
> took place at the WTO. This negotiation cluster has been the last formal
> cluster before the deadline for the submission of revised or new offers
> in May 2005. The main message from the Chair of the Services Negotiating
> Committee Chilean Ambassador Jara and the WTO Secretariat, is that there
> is a crisis in the services negotiations.
>
>
>
> During the services negotiating session in December 2004, the demandeurs
> for services liberalization – mainly developed countries plus a few
> developing countries such as India – issued a call to accelerate the
> negotiations. The Chair of the services negotiating committee and the
> WTO Secretariat backed this up by stating publicly that services
> negotiations are lagging behind and are in crisis. At the same time
> there has been no move on issues of concern to developing countries - in
> particular in agriculture. Also Non-Agricultural Market Access (NAMA)
> negotiations are not particularly moving fast. Thus the artificial
> creation of crisis can only be assessed as an effort to increase
> pressure on developing countries to table first or revised offers. When
> it is still very unclear what developing countries might gain in
> agriculture, why should they now move quickly in services negotiations –
> an area, in which most of them have a lot to lose and little to gain?
>
>
>
>
>
> MEGA SERVICES NEGOTIATION CLUSTER – UNTRANSPARENT, UNBALANCED PROCESS
> WITH HEAVY PRESENCE OF THE CORPORATE LOBBY
>
>
>
> During the three-week cluster of services negotiations, a range of
> activities took place including several multilateral meetings debating
> issues around domestic regulation, government procurement, subsidies and
> safeguard measures. There were also a large number of bilateral meetings
> between members to discuss requests and existing offers. As in the past,
> some WTO members such as the EC and U.S. with particular interests in
> far reaching market access commitments, booked rooms for corporate
> groups to lobby WTO Members, particularly developing country Members.
> During this cluster, some 40 representatives from Financial Corporations
> – Banks, Insurance groups, Pension funds among others – lobbied
> developing countries on the benefits of liberalizing their financial
> services sectors under GATS. For smaller developing country delegations,
> this often involved one delegate meeting a large numbers of persons
> pressuring them to liberalize their services sector.
>
>
>
> Countries negotiate market access commitments on a bilateral level,
> despite the fact that commitments are ultimately multilateral and thus
> offered to all WTO members. This certainly raises the question about why
> market access negotiations are not held multilaterally. If they were, it
> would allow developing countries to form alliances and strengthen their
> negotiating power. To date, resisting the pressure of developed
> countries and their lobbies, is difficult because developing countries
> negotiate individually. Very often, one developing country negotiator
> has to sit down opposite a large team of developed country negotiators.
> The resulting power imbalance in the process does not allow for a fair
> and balanced agreement and should be changed.
>
>
>
> Services negotiations are among those negotiations at the WTO which are
> the MOST untransparent, secretive and undemocratic. Several developing
> country negotiators in Geneva say, that if they would have known during
> the Uruguay Round what the GATS agreement was about, they would never
> have agreed to it. The democratization of these negotiations in
> particular by including stakeholders back home is necessary to avoid new
> services liberalization commitments with unwanted negative consequences.
>
>
>
> NEW AND REVISED OFFERS – WHAT TO EXPECT
>
>
>
> Indonesia and Uganda have announced during the last services cluster
> that they will table their initial offers. To date only the EC and Japan
> have tabled revised requests in writing, the rest of the demandeurs
> presented revised requests orally. The U.S. has already indicated that
> it will not table a better offer in Mode 4 (the temporary movement of
> natural persons). Given the unemployment rates in many other developed
> countries such as the EC which are on the rise, it is difficult to
> believe that these countries will table better offers in Mode 4 – in
> particular in the area of low skilled labour. 45 Members are still
> expected to make offers, without counting LDCs which definitely should
> be exempted.
>
>
>
> CONTINOUS ATTEMPTS TO CHANGE THE NEGOTIATION PROCESS IN SERVICES: FROM
> FLEXIBILITY TO BENCHMARKS
>
>
>
> Part of the developed country strategy to move services negotiations
> forward is to change the negotiation process in services. To date, the
> GATS allows WTO members to freely choose whether they wish to commit
> their services sector or not. Until now, the proponents of the GATS
> stressed this flexibility, in many way to dilute concerns among others
> of NGOs. However, since services accounts for two thirds of the economy
> of developed countries and their economies continue to face problems,
> they wish to secure new markets for their services industries to boost
> growth. The quantity and quality of offers tabled so far do not promise
> for this to happen. This is one of the reasons why major trading
> partners are now pushing for the establishment of so called benchmarks –
> a minimum level of commitments which any WTO member would have to make
> within this round – in order secure an outcome of these negotiations.
>
>
>
> A first attempt to specify and push for this, is a communication on the
> Liberalization of Financial Services (see attachment or go to
> www.tradeobservatory.org <http://www.tradeobservatory.org/>) which was
> tabled among others by the EC, Switzerland, Australia, Japan, the U.S.,
> Canada, Singapore, Norway but also Oman, Panama, Bahrain and Tawain. In
> this document, the proponents – besides praising the benefits of
> financial services liberalization for economic growth, stability and
> development – propose so called “Liberalization Targets for Doha
> Negotiations”.
>
>
>
> They propose the following benchmarks:
>
>     * To use the agreed definitions in the GATS Annex on Financial
>       Services for scheduling commitments
>     * To ensure commitments for all sectors in particular in Mode 3
>       (commercial presence). This includes the right to establish new
>       and acquire existing companies… and to ensure appropriate
>       commitments in cross border supply (mode 1 and 2)
>     * To remove for the mentioned modes of services delivery,
>       discrimination between domestic and foreign suppliers regarding
>       the application of laws and regulations (national treatment) and
>       to remove non-discriminatory limitations such as monopolies,
>       numerical quotas or economic needs tests and mandatory cessions.
>
>
>
> This basically means, that developing countries should remove any kind
> of barrier that currently allows them to regulate the establishment of
> banks, securities, insurance companies, asset management, pension funds
> and financial advisory services. In the view of the proponents, any
> restriction is considered bad for growth and development, as they impede
> competition and consequently raise the cost of financial services. The
> World Development Report 2005 of the World Bank, “Finance for Growth” is
> quoted to give proof for this theoretical consideration.
>
>
>
> However past experiences hardly support this position. On the contrary,
> increased competition, for example in the banking sector by allowing the
> establishment of foreign banks in a country, has often lead to “cherry
> picking”. Foreign banks are primarily interested in clients with low
> risks and high profits, essentially the rich (High Net Worth Individuals
> in banking language) and large (often transnational) companies. The
> consequence is that local banks loose these clients and are left with
> higher risk clients, such as small entrepreneurs or less wealthy
> individuals. While these higher risk groups are often in greater need of
> credit, the fact that they lose their low risk clients means they are
> less able to offer credits to the higher risk clients. The banking
> sector consequently loses its vital function in providing credit for
> economic activity of small and medium-sized enterprises. A fully
> liberalized banking sector does therefore not guarantee pro-poor growth.
>
>
>
> The tabled communication also needs to be analysed in relation to
> possible impacts for social security systems, which are still publicly
> organized in many developed countries.
>
>
>
> MOMENTUM BUILDING UP IN DOMESTIC REGULATION
>
>
>
> Domestic Regulation together with Government Procurement, Subsidies and
> Safeguard Measures are discussed and negotiated multilaterally within
> the services negotiations. These are all important areas as they set the
> rules for the scope of market access commitments. Making market access
> commitments without knowing and defining these rules beforehand, can be
> quite fatal. A commitment can turn out to be quite useless, in case
> these rules limit the commitment made or make them more far-reaching
> than intended.
>
>
>
> According to Geneva delegates, only in the area of domestic regulation
> momentum has built up. In the last few months, various countries and
> groups of countries have tabled proposals for domestic regulation. This
> area is key to the GATS negotiations as it outlines the scope of policy
> space to regulate a services sector once it is commited under the GATS.
> Developed countries seek to protect via these negotiations rights of
> services investors which are based in their countries (e.g. banks,
> insurances, water companies, retailers etc). Regulations negotiated in
> this ares shall ensure that future legislation in a sector liberalized
> under the GATS cannot hurt investor rights. The North American Free
> Trade Area (NAFTA) gives a flavor of what countries committing services
> sectors can expect. Several national or regional laws put in place by
> authorities to protect either its population or the environment after
> NAFTA came into place were challenged as burdensome and thus trade
> restrictive.
>
>
>
> The so-called “necessity test” (the criteria for necessity, the list of
> legitimate measures etc.) which is also negotiated within domestic
> regulation, is crucial in this context. In general there seems to be an
> emerging consensus that a necessity test is needed. Whether it is
> developed or developing countries, each of them sees this instrument as
> a crucial one to be able to ensure that given market access is not
> diluted by national or local laws.
>
>
>
> Recently tabled proposals are attached to this information or available
> at www.tradeobservatory.org <http://www.tradeobservatory.org/>.
>
>
>
> SERVICES NEGOTIATIONS – PROCESS FROM NOW UNTIL THE JULY GENERAL COUNCIL
> MEETING
>
>
>
> According to Geneva based sources the mini-Ministerial in Kenya, which
> takes place from 2 to 4 March in Mombasa, will be used to increase the
> pressure on services negotiations. With the current dynamic of creating
> a public image of a crisis in services negotiations, the proponents of
> accelerated services negotiations in particular developed countries will
> try again to blame the slow progress on developing countries – when in
> reality it is the EC and the U.S. who do not want to move in areas where
> they have defensive interests.
>
>
>
> Before the May 2005 deadline for first or revised offers and the next
> services negotiation cluster (from June 20 to July 3), several informal
> meetings will take place. In March an “energy week” is scheduled. At the
> end of March an informal discussion on domestic regulation will take
> place. From 27-28 April, a Workshop on Cross border Supply will be held.
> During the services cluster in June/July a special session shall be held
> on Least Developed Countries.
>
>
>
> For the June services cluster, developing countries expect a first
> proposal for the “Modalisation” of services negotiation, i.e. a more
> specific proposal for benchmarks. The demandeurs of services
> liberalization will use the next months to find some kind of formula or
> benchmarks to set parameters. It is to be expected that the scheduled
> mini-Ministerial Meetings (May in Paris, next to the OECD meeting, June
> in Korea, next to the APEC meeting and July in China) will also be used
> to maintain or increase the pressure and to discuss such “services
> modalities”. With a few exceptions, all developing countries are against
> the development of such modalities. It will completely change the nature
> of the GATS and force developing countries to liberalize services 
> further.
>
>
>
> JULY APPROXIMATION
>
>
>
> The July General Council meeting (27 to 29 of July), will be a first
> important step towards the Hong Kong Ministerial Meeting. Currently
> services negotiators indicate that as a result of this General Council a
> July approximation should come out. For services this would mean a draft
> document on domestic regulation. The proponents of a change of the
> negotiation mode in services will aim for an agreement in July to set
> benchmarks for services negotiation.
>
>
>
> CALL FOR ACTION
>
>
>
> Civil society groups need to gear up with their work on services
> liberalization. In the event that developing countries are pressured
> into commitments and into establishing benchmarks, much of the needed
> policy space for development will be lost. Key areas in which developed
> countries will push for commitments on existing autonomous
> liberalization or further WTO liberalization are among others in
> financial services, telecommunication, energy, distribution services,
> environmental services (in particular water distribution) and to some
> extent essential services such as health and education. Developed
> countries are also pressuring developing countries to make commitments
> under the GATS in sectors which are already autonomously liberalization
> (mostly due to pressure from the World Bank and IMF). While this might
> sound logic at first sight, such a decision implies to lock in
> liberalization policies into a legally binding system with no real point
> of return. Taking back liberalization commitments in the future would
> imply to compensate trading partners, either by liberalizing other
> sectors or pay compensation.
>
>
>
> Furthermore, given the fact that GATS is the hidden agenda for the
> Singapore issues, in particular investment, and that market access
> commitments lead to serious loss of policy space, it is highly
> problematic that to date almost no WTO Member has discussed tabled or
> possible requests and offers back home with the large number of affected
> stakeholders.
>
>
>
> In large part, developing countries have little to gain from services
> liberalization and consequently should carefully assess the “cost” of
> losing policy space versus the potential “gains”. In its essence, GATS
> is an investment agreement. After successfully preventing negotiations
> about an investment agreement within the Doha Round, developing
> countries need to think twice, before allowing such an agreement in
> through the backdoor.
>
>
>
>
>
> *Documents accessible as of Monday on www.tradeobervatory.org*
>
> Joint Statement on Liberalization of Financial Services (US, EC et al)
>
> Statement of Switerzland on Educational Services
>
> Domestic Regulation – Communication from Brazil et al, Communication 
> from US
>
>
>
>
>
> Alexandra Strickner
>
> Institute for Agriculture and Trade Policy (IATP)
>
> Geneva Office
>
> 15, rue des Savoises
>
> 1205 Geneva
>
> Switzerland
>
> Tel: +41 22 789 0724
>
> Fax: + 41 22 789 0733
>
>
>
> www.iatp.org <http://www.iatp.org>
>
> www.tradeobservatory.org <http://www.tradeobservatory.org>
>
>
>
>
>
>
>
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